How to Set Up a Filing and Budget System that Really Works

I’ve had so many requests for an update of my budget system and I finally have one for you today, just in time for the new year! I have implemented a number of budget systems over the past few years and have lots of ideas for what works and what doesn’t. There are a couple musts to make a budget system work and lots of ways to get to it to work for you.

Here are the MUSTS:

PLACE to keep, pay, and file bills – this can be in an office, a portable file cabinet, or a basket. The location doesn’t have to be in the same place, but it can be, make it work for you.

TRACK your bills and payments – this can be as simple as a check register or as in-depth as a whole budget notebook.

ROUTINE – put budget and bill paying into your routine so it isn’t overwhelming. I find that opening and filing bills daily and paying/tracking bills on Fridays is really helpful.

Here’s how I set up my filing and budget system – I hope it helps you get started!

I keep budget and bill paying supplies and records in my office. I have a couple pieces of furniture and accessories that I love and I believe function really well for me, but you can choose different solutions or use what you have to accomplish the same thing. (If you’re trying to get your budget in order the last thing you want to do is spend more money, right?)

FILING SYSTEM – here’s how I set mine up. Depending on what you have that needs to be filed this can take minutes or days. NOW is the time to get moving on this, it’s so much easier to start with the new year.

WALL SYSTEM – I purchased this wall system from Pottery Barn and I love it. I have tried a couple other systems and found that this works the best for my office. The components can be arranged to meet your needs and they get those papers that need to be dealt with in plain view. I have 4 pockets with 4 different categories:

TO PAY – this is where I put bills that need to get paid during the CURRENT month. I use a clothes pin to keep them all together and so I can quickly grab them when I sit down to pay bills.

TO FILE – these are bills and papers that need to find a home in the filing system. I gather these for a month and then shred what can be shredded and file the rest.

IN PROCESS – these are bills that I might need at a moment’s notice – something for my business, important financial papers, things that are currently going on. For instance, if you are re-financing your home you would keep all those pay stubs and other papers in this pocket until the deal is done. Then file or shred.

CLEAN MAMA (BUSINESS) – I keep current contracts and other important papers here. When I don’t need to access them anymore, they get filed.

BUDGET + BILL PAYING TRACKERS and PRINTABLES – This is my SECRET to staying on top of the bills, getting the bills paid on time, and getting rid of debt. Having all the information handy in my homekeeping notebook is the key – I can take a peek and see if I paid the electric bill or what the balance is on an account.

Yes, I do online bill pay, but this system works in tandem with online bill paying. I love it and my hubby does too – it’s great for accountability and all the bills, payments, and balances can be seen at a glance. I have a few different budget kits in my shop, but I am currently using the Everyday Budget + Bill Pay Kit. You can see all my printables in my shop here.

DESK – bill get paid and filed here. I can do both from my chair and having everything at an arm’s reach make bill paying and filing easy and as enjoyable as possible. This is the desk and file cabinet I have – I love the proportions and size.

With a PLACE to organize and pay bills, a system to TRACK bills paid, and a ROUTINE in place, you can definitely get your budget in order for 2015! If you need some help getting your paper piles under control, you’ll appreciate this post: 8 Ways to Get a Handle on Paper Clutter. What’s your biggest budget dilemma?

Comments

I’ve done away with paper and filing cabinets for good! I now scan and upload my receipts, bills, statements, forms, etc. to Google Drive where they can be readily accessed no matter if I’m home or not.

Originally I used a scanner to get the documents into my computer, but now I use a smartphone app called Genius Scan that allows me to take a picture of the statement. The app then converts the picture into pdf format and I can upload it to Google Drive where I’ve set up my virtual filing cabinet.

Actually, since I’m using the free version of the app, I can only email my document. The paid version lets you go to Google Drive directly. But that’s okay, even though it adds an extra step to the process, since I cut down all my paper, which used to actually pile up before I truly filed it. Now when a bill comes in, I immediately “scan” it, name it to something unique, upload it to Drive into the appropriate bill folder, then set it up to be paid online. The paper is then shredded for safety. I use the shredded paper both for composting and for making fire logs(!) so there’s no waste.

I haven’t completely eliminated my filing cabinets yet because I still going through all my old folders meticulously uploading each document, but I’ll soon be paper-free!

I agree with the no cloud recommendation. I would also recommend backing up what would otherwise be paper records on a couple of DVD’s. Documents do not take up much memory space at all. That way, if you lose your data on the flash drive you still have a viable backup.

I absolutely love the Pottery Barn system. I will have to look into that next year. In the meantime I am going to try out the budget tracker kit to work in conjunction with my Mint.com account.
Thanks for all the great tips!

This is something I’m helping my Husband with. He…has no paper organization skills. He will throw everything into a pile, then need something, get overwhelmed, and put it off forever (seriously, we just *hopefully* got his HSA sorted out a few days ago, even though is work changed banks a few months back, because he didn’t want to be bothered to find the papers he needed).
I am not nearly as well sorted as you are, but I can at least keep like with like and know how to find specific kinds of things when that need arises. My mister and I worked out a system just this week – anything that comes in, he is to leave on a specific shelf on his desk shelf…and I will put it away. Anything he needs, I will pull it out for him.
So much paper everywhere, he can’t deal with it. I, on the other hand love sorting papers, so it works out, ha!

Take care of mail as it comes in the door. Letting things pile up is a disaster. Monday is my “desk day” when all bills are paid, correspondence is done, etc. When paying a bill I scan the bill and file it in an electronic folder. No need to keep paper receipts anymore, the IRS accepts scanned documents in an audit. I also keep a Excel spreadsheet throughout the year for tax deductible items. I use Quicken Home and Business which gives you reports as needed, and year end tax reports as well that make tax preparation a snap. You can also do your budget right in Quicken. The key is not to overthink things. Simple is always best!

I would love to scan all my paperwork but my husband says we still have to keep all papers for IRS. Does anyone know if we have too? I’m so tired of papers. Please help! we have many bills and bank statements laying around.

Why would you need paper copies for the IRS? They want you to e-file so they don’t have to handle your paper either. Besides, if you keep electronic copies you can either send electronic copies to whoever needs them. At the very least you can print them out as needed. The the electronic nay-sayers, yes you can lose electronic data but paper can burn too.

We compromise – we scan and shred most docs, but keep hard copies of tax, dmv, and income docs. Anything that would be difficult to replace. Assuming no electronic apocalypses 😀 , bank statements, credit card statements, utility bills and others are replaceable. Granted, this could be a headache if one is audited, but probably not as much a headache as pile of papers that *may* be sorted somewhat by year. Ahem. Totally NOT describing my own [former] *system*.

My fiance and i handle bills differently. Most of mine except my phone bill come in paper form and his which is all our electrical, gas etc come through on line. Which means he knows where their due but i have no idea. Any ideas